I did extensive backtesting and posted my results including the optimizations and the equity curves in this thread. You may want to read over my previous posts.

I am not a fan of backtesting because I use a lot of discretion. But this is a really simple setup so I thought backtesting would give me more confidence to trade it. I'm sure results can be improved with discretion but I simply don't have the time to invest right now.

An inside bar on low volume just above strong support is not bearish at all. Of course it easier to see this with hindsight than in real-time. I just want to come back to the idea of Tony Crabel here, who introduced the concept of a breakout preference, which means that you only take the breakout in a defined direction.

The problem with the setup is that the inside bar occured just above extremely strong cross-support on declining volume. Declining volume means a low probability that the countertrend continues and breaches the support line.

Most inside bars happen on decreasing volume because they are a sign of market indecision, so I'm not sure filtering out low volume IBs will do any good. Just looking at my charts every IB in July had less volume than its previous bars.

If you take absolute volume, you are certainly right.

Some inside bars have higher volume per range than the preceding expansion bar. These are churn bars. The pattern expansion bar + churn bar can be predictive of a reversal, if other conditions are met, such as below/above support/resistance and overbought/oversold conditions.

Wow, that looks great and also a good thing to know that the ES actually looks much safer an instrument to trade this.

Where can I learn more about Crabel's thoughts on breakouts and breakout preference?

This thead is getting a bit cumbersone. You will find information on Tony Crabel in post #409. His book is not easily available, unless you look for illegal copies. He has not published again, but is running a hedge fond with more than USD 1 billion under management. I guess that some of his findings were real. The book is a bit outdated, but a real classic, comparable to Welles Wilder's "New Concepts in Technical Analysis" from 1978.

The Crabel book is a great book. I don't consider obtaining a copy of something illegal if the something is no longer available for purchase. Neither Crabel nor the publisher will make or lose any money from the PDF copies of his book. If fact the only ones who could lose money would be the speculators who paid $$$ for the book hoping for a greater fool.